Via the Central Bank comes the following statistics. I’ve taken the stats and put them in a graph, which I think helps us understand the extent of the mortgage arrears problem. The euro amount of arrears of 180 days or more has increased by 375% since September 2009, or from €306,730,000 to €1,461,816,000 in just three years. The total amount of mortgages in arrears over 90 days is €16.8bn or 15.1% (Source)
The other interesting thing is the new data from the Central Bank. For the first time they have given a breakdown of mortgages in arrears over 180 days. These are worrying statistics: €785,800,000, or almost 54% of the mortgages in arrears over 180 days are in the over 720 days category (out of a total balance of loans of €4,193,875,000).
House Completions (Number) by Month in Ireland 1975 – 2011
(a) House completions data series are based on the number of new
dwellings connected by ESB Networks to the electricity supply and may
not accord precisely with local authority boundaries. These represent
the number of homes completed and available, and do not reflect any
(b) Due to circumstances beyond the Department’s control it has not
been possible to obtain a separate set of figures for the first 6
months of 2005.
(c) These data excludes conversions of buildings into residential
units, which are estimated to total 400 each year since 1992.
I’ve graphed some of the Eurostat data mentioned here. Brian Lucey reckons this means that our deficit for 2010 as a whole (as oppose to the quarterly figure) will be around -20%. Have we turned a corner?
I also drew (very poorly) some graphs, arguing that the only way property prices were going was down. By a significant amount. Some of the lads over in politics.ie sniped that my poorly drawn graphs were laughable (they sort of were), but the logic behind them was, I believe, sound. Some disagreed.
So let us return to those graphs from 10 months ago. Here is the graph I drew in September, based on CSO data for second hand home prices:
You can see that as of Q1 2009, average national house prices for second hand homes were around €290,000. Next up, my graph (which included more recent ESRI prices from July 2009 at €240,000).
My argument was that prices would continue to fall, more or less symmetrically with how they would have risen. In other words the second property bubble was from 2002 to late 2006, about a four year period. In 2002 average prices were about €200,000. My graph indicates that prices would return to €200,000 by mid 2010, about a four year period. Well I would argue that they now have done so.
Here is the latest date from the CSO. Prices continued to fall, passing well below €250,000 in Q4 2009 (€40,000 below the floor Lenihan called).
But we don’t have Q2 or Q3 2010 figures from the CSO yet obviously, so let’s have a look at the ESRI figures.
According to the ESRI for Q1 2010, average national house prices are now €204,830, and we can easily imagine that since March, prices have continued to fall. Which means house prices are now back to 2002 levels, where our second property boom started.
The question now is, will we start now unwinding the first property bubble, 1997 to 2002? I believe we will. I would see prices returning to 1998 levels, factoring in inflation, which would lead to a national average house price of about €130,000 – €140,000 by late 2011, or early 2012. It could even be lower than this, as it tends to overshoot on the downside. I see no factor that would keep prices where they are now. Government policy and/or NAMA are the only variants that did not exist before – but I still do not see them being able to counteract the other major factors: rising unemployment, lower credit, a shrinking economy, bankrupt banks and oversupply of houses, among others.
Unfortunately for us NAMA officially called the bottom of the property market in November 2009. Since then its own assets have significantly decreased in value.
Of course if anyone disagrees with my analysis, have at it in the comments.
The final quarter of the list of tax defaulters fined or penalised by Revenue during 2009 was published last week. As usual details for name, address and penalties incurred for each defaulter, along with some information on the individual’s occupation, were included. I’ve used that to extrapolate further information and form statistics which can be seen in the graphs below.
Revenue gets our money back into the tax coffers in a number of ways. One is by fining people for, typically small, instances of tax avoidance. That type of case is often for cigarette or alcohol smuggling, failure to lodge income tax returns or the sale, delivery or use of laundered oil. In such circumstances the relevant individuals or companies are usually fined between €250 and €7,000.
In other cases companies make settlements to pay back taxes which, through an audit, Revenue has discovered they owe. These settlements usually involve much larger sums. Almost all of those who make settlements are companies or wealthy self-employed invididuals. Revenue does not publish most settlements of less than €30,000.
To give some idea of the scale between the values of fines and settlements; in Q4 of last year fines totalled €770,000, settlements reached nearly €18million. This was despite there being multiple times the number of cases where fines were made than settlements. It would be an oversimplification (but broadly accurate) to say fines are against the labourer, settlements are made by the developer.
One of our regular readers, Steve White, has taken the data we collated on political donations and used a visualisation tool to display it.
The box below proportions donations to political parties (not including donations directly to politicians) by donor industry. To change the way the information is shown you can move the “Description of Donor” arrow at the top back behind the “Party” arrow. Doing that will show you to which party donations from a certain sector went to… unsurprisingly Fianna Fáil make up about 90% of the Property and Construction box.
It should be noted that this was built using incomplete data. We have only accredited an industry to about 70% of donors in our political donations spreadsheets, additionally, to give a complete visualisation you would need to add in the details of donations to individual politicians. We’ll be doing this over the next few months, sit tight.
When that is done I’d guess that the percentage of donations from property and construction would be about 55% FF and 30% FG, with the other parties, bar the Greens, covering the rest. This one is skewed slightly because big developers have tended to donate directly to the party, but it is still interesting.
Another very illustrative chart, especially in the context of NAMA is this graph. It shows average house prices since 1975.
Where do you reckon prices are going naturally? If you draw a line from 1975 along the average until the bubble started around 1996/1997 and keep going… prices would be headed back to around 4 times average salary, circa €120,000.